Mike’s Moment: What is the Retail World Going to Look Like in 5 Years?

Here we are another market edition of RootNotes. Emmet talks about his early days going to 120 or so NC markets so my 35 years is pale in comparison. But it’s still a long time no matter who’s counting.
There’s been lots of changes over the years but I don’t think I have seen anything like the rapid changes we have seen this past 24 months. Retailers think about what they need to do to compete with the Inter-net players. Factories have to drill down efficiencies to compete for relevancy with major retailers. Faster deliveries, no questions asked returns, unlimited se-lection seem to be what young and old buyers expect. Delivering on those promises while still trying to be competitive and earn a little money on the bot-tom line is a real challenge in a stagnant sales environment.

As I try to envision what the retail climate looks like 5 years from now it is probably going to be very recognizable in some areas of brick and mortar stores. Those retailers that communicate a consistent message to a targeted audience of buyers providing a value product will be doing fine. People will still need to buy furniture. However these same stores will have made investments and infrastructure improvements so that their logistics and processes align with how the consumers want to do business. Whether it be mobile commerce, ecommerce, or some new method, these retailers will be competing to capture and retain a loyal customer base.
As Amazon and Walmart duke it out for consumer mind share online it only furthers the emergence of a multi-platform expectation from consumers. Though Amazon is not in the brick and mortar business in a big way yet, the trends of them buying Whole Foods and experimenting with specialty stores show that five years from now brick and mortar will be a portion of their strategy. If customers want to buy a product in a store, they have that option. If they want to buy it online, that is seamless. They are training the customers on expectations and forcing all others to ramp up their game or be left behind.

At Furniture Sales of Mid-America we have dealt with all types of customers from big to small, mass merchants to specialists, internet only retailers to brick and mortar only. We have seen lots of best practices. What I am constantly amazed at is how little any traditional retailer ever asks what we see that is working. We are viewed strictly as reps. Occasionally they want to know what products are selling, but rarely do they ask us how others are solving problems. And then when they do decide a course of action it takes a long time to change the system.

Contrast this with Amazon who one year ago at this October market decided they wanted to see how a furniture operation worked and in particular a furniture distribution warehouse worked. They asked for our help in arranging a visit which we did. They sent 8 people to the factory tour all with different functions within Amazon and many of who had never met each other. Buyers, structural guys, managers, and ware-house logistics. Within 6 months from the time of the visit, they redid their DC’s to handle large products (not just furniture) based on what they learned on this factory visit. There is only one other company we work with that moves that fast and they too are dominating their markets.
So as I consider what retail looks like in five years I have to say that it’s going to be Fast… fast action, fast delivery, fast decisions. In our repping world we will also see changes based on what technology can help enhance how we service our dealers. Trying to adapt to the needs of the consumer will keep us all on our toes more so than at any other time in my 35 years or Emmet’s 120 or so Southern markets. I look forward to continuing this discussion with you in a couple of weeks at the High Point market.
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